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TMI Blog1991 (2) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... ere completed as permitted by this Court and consequently, the petitioners have amended the writ petitions by filing appropriate applications. Two periods are involved-(i) January 1, 1983 to December 31, 1983 and (ii) January 1, 1984 to December 31, 1984. The manufacturing process of the beedi is explained by the petitioners therein. The petitioners supply the tobacco and the beedi leaves to the contractor, who in turn distribute them to the sub-contractors and workers. The tobacco pieces are rolled in the beedi leaves and each beedi is yarned around. These are raw beedies; they are collected back by the petitioners and heated appropriately to remove the moisture and impart flavour to the beedi. The beedies collected from the workers/contractors will have moisture, since, the leaves used for rolling are soft and moisty. If these raw beedies are not heated, they would develop fungus very soon and the beedies cannot be smoked; further unheated beedies would not have any flavour, taste, etc., which make the beedi smokable. The raw beedies collected from the workers through contractor are thereafter heated in appropriate chambers, very early. These beedi rollers (workmen) reside outsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from within the local area contractors. These raw beedies at the time of entry into the local area from outside and even thereafter remain wet or drenched since the leaves were soaked with water before rolling. Such raw beedies are unfit for human consumption and susceptible for formation of fungus therein unless they are heated in our heating chamber within 24 hours of rolling, as otherwise due to moisture content of the leaves the tobacco contained therein would be spoiled. It is a health hazard to smoke raw beedies before heating and nobody consumes or smokes the raw beedies. A most significant aspect to be noted in this behalf is that raw beedies are not at all marketed. Raw beedies are not available in the market for sale or purchase." The petitioners had produced before the assessing authority samples of (i) a bundle of raw beedies rolled and (ii) a bundle of heated, labelled with brand name and excise duty paid beedies, along with a letter dated July 20, 1988 (annexure D in W.P. Nos. 9583 and 9584 of 1988). The assessing authority, in his order (annexure K) states: "The dealer in order to bring some force to his contentions has produced the samples of labelled beedies and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elled before marketing. Each manufacturer has his own brand name on the label. But there are a few who sell loose beedies which are not labelled; these beedies are finished smokable beedies, but not bundled up and rolled; such beedies are referred as khulla beedies, popularly. This peculiarity of a khulla beedi has not been noticed by the assessing authority. We think, the assessing authority erred in his observation when he says raw beedies are smoked by a few; he has mistaken the raw beedies as khulla beedies. Raw beedies are not marketed at all; it will be a health hazard to smoke them in view of the moisture affecting the tobacco. If not heated after rolling these raw beedies would be subjected to natural decay. This part of the assessing authority's finding has to be ignored as entirely mistaken; he has equated khulla beedies with the raw beedies. Therefore, we proceed to decide the question involved here on the basis that khulla beedies are finished products, after being heated appropriately, beyond the stage of raw beedies. Raw beedies are non-smokable. The question, primarily, is whether a raw beedi is a beedi for the purpose of entry 2 of the Schedule to the Act. Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject under entry 2 of the Schedule to the Act is, therefore unacceptable. Tobacco products like beedi, cigarette, zarda, etc., are used in view of their flavour, taste and other feelings imparted by them. Beedi is a product which comes out only after appropriate heating, and different brands of beedies have their own taste and flavour because of the difference in the temperature imparted while heating. A few other contentions are required to be considered now. Mr. Indrakumar's first contention was based on the concept of "goods". Since section 3 of the Act levies tax on the entry of the "scheduled goods", it was contended that, a thing which is not "goods" would not be the subject of the levy; alternatively, the learned counsel contended that item 2 of the Schedule to the Act enumerates "tobacco products like beedies, etc." and therefore if a thing is not a "product" at all, it cannot be a tobacco product. In other words, a thing which has undergone a full process of production can be called as a product and not a semi-finished thing or an article. Several decisions were cited to urge that only finished products are goods. In Union Carbide India Ltd. v. Union of India [1987] 64 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t held (at page 1098 of AIR; 447 of STC): "It does seem to us that in order to attract excise duty the article manufactured must be capable of sale to a consumer. Entry 84 of List I of Schedule VII to the Constitution specifically speaks of 'duties of excise on tobacco and other goods manufactured or produced in India...' and it is now well-accepted that excise duty is an indirect tax in which the burden of the imposition is passed on to the ultimate consumer. In that context, the expression 'goods manufactured or produced' must refer to articles which are capable of being sold to a consumer." The proposition advanced by the learned Government Advocate is quite commendable and the reasoning is attractive. However, for the purposes of these writ petitions it is not necessary to consider the question whether the State Legislature is competent to levy entry tax only on a finished product having a market, that is, whether, it should be a commercial commodity. We have to decide the meaning of the word "beedi" and whether, the "raw beedi" is a commodity like beedi, cigarette, etc. The learned Government Advocate also pointed out that tax is on "entry of goods into a local area for cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om each other, that is, the more general is restricted to a sense analogous to a less general. The same rule is thus interpreted in 'words and phrases' (Vol. XIV, p. 207): 'Associated words, take their meaning from one another under the doctrine of noscitur a sociis, the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it; such doctrine is broader than the maxim ejusdem generis'. In fact the latter maxim 'is only an illustration or specific application of the broader maxim noscitur a sociis'." An analogous principle is that when general words follow particular and specific words of the same nature, the general words must be confined to the things of the same kind as those specified. But the specific words must form a distinct genus or category-(vide: Kavalappara Kottarathil Kochuni v. States of Madras and Kerala AIR 1960 SC 1080 at 1103). The contention urged was that, the tobacco product to fall within entry 2 of the Schedule should have the likeness of other specified articles (beedi, cigarette, cigar, zarda, etc.). The likeness has to be drawn from all these enumerated articles; in other words, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to the residuary entry in the Schedule whereby all raw materials, component parts, inputs, etc., were roped into the net of taxation. The learned counsel contended that raw beedies at least will be raw materials or inputs falling within this entry. We cannot entertain this contention, since, it was not the case found by the assessing authorities. Further, the question whether the petitioners are industrial units as stated in the explanation to the entry, to attract the levy, is a matter of investigation. According to the petitioners, they are not governed by the Factories Act and the definition of "factory" in the said Act is inapplicable to them. We don't express any opinion on this question. In case proceedings can be initiated afresh, by resort to the said entry, under the Act, it is left to the Revenue to do so. In one of the writ petitions, a further question against taxing the entry of packing material/container, referred as "bardhan" is raised. "Bardhan" is another name for "gunny bag"; gunny bags are exempted under the Act; consequently, the petitioners are right in this contention that these are outside the scope of the levy. Consequently, these writ petitions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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